USD/CAD holds weaker below 1.28 handle, over 1-month lows

   •  Positive NAFTA news prompts some aggressive selling on Tuesday.
   •  Subdued USD demand fails to stall the ongoing downfall.
   •  Traders now eye US ADP/ISM PMI for some fresh impetus.

The Canadian Dollar continued strengthening against its US counterpart, dragging the USD/CAD pair to fresh 1-month lows on Wednesday.

The pair on Tuesday slumped over 140-pips and dropped below the 1.2800 handle on a report that the US President Donald Trump was looking for a NAFTA deal to be struck in two weeks, during the final round of talks at a Summit on April 9th.

The selling pressure remained unabated through the Asian session on Wednesday and was further weighed down by a mildly softer tone around the US Dollar. However, a modest weakness in crude oil prices did little to provide any additional boost to the commodity-linked currency - Loonie and helped limit further losses, at least for the time being.

Currently holding with modest daily losses, just below the 1.2900 handle, traders now look forward to the US economic docket - featuring the release of ADP report on private sector employment and the ISM non-manufacturing PMI, for some fresh impetus.

Technical levels to watch

A follow-through weakness below 1.2780 level is likely to get extended towards 50-day SMA support near the 1.2730-25 region en-route the 1.2700 round figure mark, nearing 100-day SMA. On the upside, any meaningful recovery attempt beyond the 1.2815 level might now confront some fresh supply near mid-1.2800s, above which the pair could dart back towards reclaiming the 1.2900 handle.